Federal Fair Access Principles

As policymakers work to implement the President’s Executive Order addressing account closures caused by regulatory overreach and supervisory pressure, they should consider the following principles to promote and preserve risk-based decision-making, and ensure that political or religious beliefs do not unfairly affect customers’ access to banking services.

• Competition and Free Enterprise. Regulators should recognize the unique priorities of banks. Banks are private enterprises with obligations to maximize value to shareholders through providing appropriate services to customers and communities, managing their balance sheets, operating in a safe and sound manner and ensuring compliance with all applicable laws and regulations, including consumer protection laws. The market for financial services in the United States is highly competitive. Individual financial institutions must be able to make their own risk- and business-based decisions consistent with their particular business models, strategic priorities and expertise, taking into account safety and soundness standards. Financial institutions also must be permitted to offer different terms and pricing in accordance with sound risk-management and prudent business practices.
• Harmonization with the Bank Secrecy Act and Law Enforcement. Any legislative or regulatory solution should explicitly allow financial institutions to take actions to protect against financial crimes risk as required under the federal BSA/AML and sanctions laws and regulations and to comply with lawful requests by law enforcement. Banks must be permitted to make risk-based decisions to manage and mitigate financial crimes risk. Regulations should be modernized to provide clarity about what information can be provided, consistent with the Bank Secrecy Act, to provide any explanation of the circumstances of a denial of service or account closure. Banks should not be required to disclose proprietary methods or strategies, confidential supervisory information, or information that would interfere with state or federal law enforcement investigations.
• Scope of Fair Access Requirements. Fair access requirements should apply to deposit accounts and fee-based services of an insured depository institution, and similar accounts of non-bank financial institutions. If fair access requirements apply to lending, credit activities, or other financial services or products, depository institutions must be allowed to manage their risks effectively. In accordance with existing regulatory standards, regulators should not require banks to provide products or services that do not make financial or strategic sense for the institution, including products and services they are not equipped to provide (e.g., a bank without relevant expertise should not be required to engage in aircraft financing) or that exceed the bank’s established risk appetite.
• Preemption. As provided pursuant to the Supremacy Clause of the U.S. Constitution, federal requirements must broadly and expressly preempt any non-federal fair access or account closure legislation to avoid inconsistent and unduly burdensome requirements across 50 states.
• Enforcement and Penalties. Requirements should be enforced by the financial institution’s appropriate federal financial regulatory agency, informed by existing consumer complaint mechanisms. Any violations should be subject to ordinary proceedings and penalties under the Federal Deposit Insurance Act (12 USC 1818). There should be no private rights of action, which could result in costly plaintiffs’ actions and increase the cost of services to customers. To align the interests of the public, financial institutions and regulators, these new requirements should reaffirm that federal financial regulatory agencies may not require a bank to close an account or otherwise take any supervisory or enforcement action against an institution solely based on reputation risk.